Population and the economy: a virtuous circle

Population and the economy: a virtuous circle

ABS data shows Australia’s population grew by 1.6 per cent over the year to September 2017, the equivalent of 395,600 additional residents. While there is a strong link between population growth and economic performance, population growth does require top city planning.

“Today’s ABS figures show that there continues to be a strong link between population growth and economic performance,” commented Shane Garrett, HIA Senior Economist.

ABS Demographic Statistics for the September 2017 quarter indicate that Australia’s population rose by 1.6 per cent over the year to the September 2017 quarter, equivalent to 395,600 additional residents.

“The strongest performing labour markets in Australia remain those that have experienced the largest increases in population over recent years.

“Population growth in Victoria is stronger than in any other part of Australia. The economy there is very healthy with robust gains in employment over recent years. Today’s figures show that the number of jobs in Victoria has increased by 68,000 over the past year.

“In contrast, population growth in the Northern Territory has completely stalled, a situation which is hurting demand in that economy. The number of people working in the NT has fallen by 3.5 per cent over the past year.

“Inward migration boosts the economy’s productive capacity and is an important support for consumer demand.

“Population growth does place additional pressure on our cities. The solutions lie in better city planning, the funding and delivery of new and upgraded infrastructure, and job creation. We cannot simply close down our cities.

“The long term risk for Australia is that we will have too few people of working age over the coming decades. The realistic option for us is to keep the door firmly open to the migrants we need.

“HIA supports a managed migration programme that is sufficient to deliver ongoing growth in Australia’s economic performance, productivity and workforce capacity. These conditions are essential for continuing to win investment from overseas,” concluded Shane Garrett.

Over the year to September 2017, Victoria saw the strongest growth in population (+2.4 per cent), followed by the ACT (+1.8 per cent) and Queensland (+1.7 per cent).

NSW placed fourth for population growth over the same period (+1.6 per cent) with Western Australia fifth (+0.9 per cent) and Tasmania sixth (+0.7 per cent).

The Northern Territory’s population was flat over the 12 month period. An increase of 0.6 per cent was recorded in South Australia’s population.​